CHAPTER ONE
INTRODUCTION
1.1 Background of
the study:
The success or failure, of any organization
product offering(s), be it goods or services, depends immensely on the
strategies and technologies used in developing, maintaining and sustaining such
products or services in the target market. The extent to which these
responsibilities/duties/tasks are successfully carried out is as a result of
the unusual skills, experience and ability possessed by the owner
(entrepreneur), of the said business organization; to effectively co-ordinate
the human and material resources in that organization, in order to achieve the
stated organisation objectives either to make profit or community service
rendering.
The said responsibility of the
‘entrepreneur’ can be emphasized in the definition given by Edward P. Lazear.
According to him, an ‘entrepreneur’ is a generalist who put together terms of
people and assembles resources and capital. To do this effectively, they must
have a general set of skills.
Although an individual maybe endowed with a
set of skills but endowment can be augmented by investment in human capital.
Therefore, responsibility of assembling, coordinating, etc. of these said
resources cannot be carried out effectively by a mere business owner whether it
is a small organization or a large firm.
These said skills, possessed by
‘entrepreneur’, enables them provide products ( in form of goods or services),
of great additives, which is second to none in the market of industry; is
referred to as the quality that must be possess by an individual to be a
successful entrepreneur, and it’s called ‘entrepreneurial skills’.
The term, ‘entrepreneurial’, is an
adjective concept that is used to describe the degree of entrepreneurial trait,
that an individual possess or exhibit or the pattern of entrepreneurial
behaviour, present in an individual activities. Therefore, it can be said that
a person who displays some skills or habits, typical of an entrepreneur, is
said to be ‘entrepreneurial’.
It is possible, that entrepreneurial skills
are embodied in the networks with customers, suppliers and other market
participants that enhance the outcomes of entrepreneurs. It’s also possible
that it is the greater ability to identify markets, set strategy and correctly
analyse the various business problems and also enables organization develop
their product portfolio.
In enhancing the outcomes of an
entrepreneur, a sequential process or procedures must be followed. This is
termed as ‘entrepreneurship’.
According to Kuratko and Hodgetts (2001),
entrepreneurship is the dynamic process of creating incremental wealth. This
wealth is to be created by individuals who assume major risks in terms of
equity, time and career commitment of providing value inform of some products
or services, which may not be new or unique, but the entrepreneur must place
value by securing and allocating the necessary skills and resources.
The focus of this study, is on skills which
will also encompass the ability to successfully allocate resources (human and
material), for the achievement of the objective.
A skill, can be said to be an organized and
coordinated pattern of mental and or physical activity in relation to an object
or other display of information usually involving both the receptor and effect
or process. It involves having enough ability knowledge and experience to be
able to do something well.
Hence, for a person to be regarded as an
entrepreneur he/she must possess some certain unusual and personal attributes,
behaviour, values and skills or skills that allows them to successfully develop,
setup, grow, render and maintain a product of great addictive which consumers
within the industry sees as second to none. They are referred to as the agent
of effective economic changes, an enterprising individual, job creator, the
goal getters, etc.
The various skills of entrepreneurs have
been classified into three (3), (Linus Osuagwu, 2006). They are ‘technical
skills’, ‘business management skills’ and ‘personal entrepreneurial skills’.
Technical skills are said to involve such things as writing, listening, oral
presentation & communication, monitoring environment, ability to organize,
etc. on the other hand, management skills includes those areas involved in
starting, developing and managing any enterprise i.e. skills in decision
making, marketing, general management/administration, financing, accounting,
production, controlling and negotiating which are essential in launching and
growing a new business venture.
While personal skills are some skills that
differentiate an entrepreneur from a manager i.e. inner control/discipline,
risk taking, being innovative, being change-oriented, being persistent,
visionary leader, etc.
All these entrepreneurial skills are
undoubtedly needed in every facet or an organization product development or
product life cycle (development, growth, maturity and decline stages), to
ensure the sustainability of the various products to a state of economic
stability and growth in order to maximize profit.
For a setup to be referred to as
organization, it must have a product offering i.e. goods or services which it
is to render to consumer in exchange for profit. An organization product(s)
offering, is the set goods or services rendered by the said organization to
satisfy the needs and wants of its target market, for the purpose of achieving
it stated goals and objective. And if the said product offering is well
coordinated, it will lead to high demand and continuous existence of the
product and it will automatically bring about the need for the said
organization to expand its scope or area of production either by diversifying,
integrating, among other option available to the organization. Hence, the need
to develop or design a product portfolio arises.
A portfolio is referred to be a set of
investment. In other words, an organization product portfolio can be referred
to as a set or list of the organization product offering (their investment).
When an entrepreneur owns only a single
enterprise, he is referred to as a novice owner/entrepreneur. Habitual-serial
owners/entrepreneurs are those that start more than one business consecutively
and habitual-portfolio owners/entrepreneurs are those who start more than one
business concurrently. As documented by extant relevant literature on small
business ownership (Carter, 1999).
‘Portfolio entrepreneurship’ is concerned
with the ownership of multiple businesses by a single entrepreneur and it is
viewed as a means of reducing or spreading business risk.
The need for entrepreneurial skills for
product portfolio development evolved as a result of the strong gaps or lack of
qualification often faced by small, medium scale enterprises (SMEs) owners,
which leads to some set back such as liquidation, low profit, product offering
reaching the decline stage within a short period, etc.
Also, there are certain commonalities that
exist between small, medium enterprises and entrepreneurship that allows
‘entrepreneurs’ venture in to the medium scale enterprises and making it their
habitat. It has gotten to the point that it has become a common practice or tradition
to discuss entrepreneurship in relation to small, medium enterprises. For
instance, SMEs requires low capital setup which will encourage ‘entrepreneurs’
who have what it take but low capital to setup a business, they can both be a
sole proprietorship business or partnership i.e. joint venture, merger, etc.
Hence, SMEs and entrepreneurship needs to
be dealt with or handled hand in hand for development to take place in an
organization because most SMEs owners lack the required skills and ability to manage
a business to a state of stability and sustainable growth and help build their
business activities in to an empire and reduce/minimize the setbacks mostly
faced by SMEs.
With the small enterprise inventions,
adaption’s and general technological development are possible (Kilby (1965),
and Mothweit & Zegveld (1981). Also, Steel and Takasi (1982), note that
small enterprises have potentials for absorbing labour while maintaining
output. And this objective can be greatly achieved with the help of entrepreneur
intervention in SMEs industry through the application of the various
entrepreneurial skills.
In other word, if all the necessary
entrepreneurial skills are also use and maintain in SMEs it will help greatly
in developing their product portfolio. Also due to entrepreneurs ability to
perceive new business opportunities in the environment they will be able to
expand the business horizon in SMEs and thus develop the organization product
portfolio by increasing the set of number of product produced by such organization;
if well-coordinated hence product portfolio development.
With all the above explanation of who an
entrepreneur is and the skills and abilities they possess, including the
weakness of SMEs, one will see that there is need to develop entrepreneurial
skill for product portfolio of an organization to be developed mostly in small
medium enterprises, which will lead to economic development in general ( at a
speedy rate).
1.2: STATEMENT OF
THE PROBLEM
There are thousands of people who have
nursed the aspiration to setup their own business(s). for most the prospect
remains just a wishful thought, for others, something happens in their live
which presents an opportunity, which they perceived or make use of, perhaps an
un-expected inheritance; or an event which forces or bring about a change in
direction. But having the capital available to start a business is not enough.
Even in the case of the trade men who is made redundant and possesses both the
technical skills needed to work and the redundancy pay out to start his,
surviving in business requires some unique or unusual skills. The problems lies
firstly in identifying which specific skills are mostly relevant to the
business proposal, and secondly in determining objectively whether or not they
are available in the person (entrepreneur to be). In the event that the
required skills are not currently available, then those deficient skills must
either be developed or imported i.e. by employing an intrepreneur (imported
skilled personnel), or going for training (developed skills).
1.3 OBJECTIVES OF
THE STUDY
The aim of this study is to examine the
effects of entrepreneurial skill on the development of organizations product
portfolio. The specific objectives are to:
1. Identify
the skills of an entrepreneur.
2. Evaluate
the relationship between entrepreneurship skills and product portfolio development.
3. Identify
the problems militating against entrepreneurs in the product portfolio
development.
4. To
proffer solutions to the identified problems
1.4 RESEARCH
QUESTIONS:
For the purpose of this research work, the
following question will enable one to find answer to the patient problem of
entrepreneurial skills on product portfolio development. They are:
i)
What are the skills of an
entrepreneur?
ii)
What is the relationship
between entrepreneurship skills and product portfolio development?
iii)
What are the challenges
militating against entrepreneurs in the product portfolio development.
1.6: SIGNIFICANCE
OF THE STUDY:
The study considers the effects of entrepreneurial
skills on product portfolio development. This will guide owners of businesses,
managers, researcher and students in the area of skill development. The study
will provide basic understanding of the impact of entrepreneurial skills
development in Lagos and Nigeria in general. It will also contribute knowledge
as to how business in Nigeria could create and refine their capacity to
establish and implement an effective product portfolio for the sustainability
of organizations in the future.
1.7 LIMITATIONS OF
THE STUDY:
The scope of this study is limited or shall
be restricted to forty (40) small-medium scale enterprises in Lagos state,
specifically in Ojo and Lagos island local government area. Also problems such
as funds, sources for appropriate materials and time were encountered.
1.8 DEFINITION OF
TERMS:
Entrepreneur: He is a risk taker,
who buys at a certain price and sells at an uncertain price. He brings all
factors of production and resources of both man and materials needed for
effective production together.
Skills: Any work-related
to learning or training or personal ability that results in enhanced knowledge
and aptitude to perform a job.
Products: A product offering
of an organization is the goods or services that is provided by the organization
to satisfy its consumers’ needs and wants for profit making purpose or
community service rendering.
Product
development: It is the process of creating new products or enhancing old
products to serve the needs and wants of customers who are ready to buy the
product or is already purchasing the product.
Market: It is referred to
as the group of consumers or organization that is interested in the product
offering of the organization, has the resources (fund) to purchase the product
and is permitted by law and other regulatory bodies to acquire the product. A
potential market or target market is the total population who has interest in
acquiring the product. While the penetrated markets are those in the target
market who actually purchased the product.
Product portfolio: This is the list of
the set or range of products which is being offered by the firm to its market.
Entrepreneurial: Is an adjective
concept that is used to describe the degree of entrepreneurial trait that an
individual possess or exhibit.
Business: Business is any
purposeful activity engaged in by an individual or groups of individual in
other to satisfy their customers’ needs and wants in exchange for profit.
Development: It is a state of
growth where by a particular individual, community, country, etc. becomes
larger, more nature or more advanced.
Small medium
enterprises: Are business enterprises that are setup with low capital and
less management team.